Arabsat and Telesat Forge Strategic Partnership for Broadband Capacity
In a significant development for the telecommunications landscape, Saudi Arabia’s Arabsat has entered into a strategic agreement with Canadian satellite operator Telesat. Announced on May 14 in Tampa, Florida, the deal involves acquiring broadband capacity from Telesat’s anticipated low Earth orbit (LEO) satellite constellation, known as Lightspeed. This announcement closely follows a key regulatory milestone achieved by SpaceX, led by Elon Musk, which now allows the sale of LEO services to maritime and aviation clients in the region.
Telesat’s Lightspeed constellation is an ambitious project consisting of 198 satellites set to launch next year. This initiative marks a pivotal expansion in Telesat’s service offerings, as the company is traditionally known for its fleet of geostationary orbit (GEO) satellites. The agreement with Arabsat is based on a term sheet that outlines the provision of multiple gigabits per second of broadband capacity, although specific financial terms remain undisclosed. The two companies are aiming to finalize their agreement by December, following a memorandum of understanding signed the previous year to explore long-term purchasing options.
Telesat recently reported a substantial increase in its LEO revenue backlog, reaching 1.1 billion Canadian dollars (approximately $787 million USD) as of its first-quarter 2025 earnings report. This figure represents a significant rise from the 600 million Canadian dollars previously disclosed, much of which is attributed to commitments from the Canadian federal government.
The Competitive Landscape of Satellite Broadband
The expansion of Telesat’s backlog aligns with its multi-year LEO capacity contract with Viasat, a GEO operator facing increased competition from SpaceX’s Starlink network. Starlink, which boasts the world’s largest constellation with over 7,000 satellites in LEO, has been a disruptive force in the satellite broadband market. Despite the competition, regional GEO operators like Arabsat acknowledge that Starlink’s presence has elevated the visibility of the space industry as a whole.
Starlink’s services, which started five years ago in consumer broadband, have rapidly extended into government and enterprise markets—areas that Telesat’s Lightspeed network also targets. On May 13, Elon Musk announced Starlink’s regulatory approval in Saudi Arabia during an investment forum hosted by a White House-led delegation to the region. This move further solidifies Starlink’s footprint in the Middle East.
Market Dynamics and Future Prospects
Starlink’s main competitor in the LEO broadband market is France-based Eutelsat’s OneWeb constellation, which similarly focuses on government and enterprise clients. In 2021, OneWeb formed a joint venture with Saudi Arabia’s NEOM Tech & Digital Company to distribute broadband capacity, supporting the development of a futuristic city and tourist destination in the country’s northwest. However, OneWeb has faced challenges due to delays in deploying ground infrastructure, which has affected its service rollout in Saudi Arabia and other regions.
Despite these challenges, the growing demand for satellite broadband underscores the importance of partnerships and innovations in the industry. The collaboration between Arabsat and Telesat highlights the strategic shifts occurring within the sector, as operators seek to leverage new technologies and expand their market reach.
Understanding Satellite Orbits
To better understand the context of this development, it’s important to explain the difference between GEO and LEO satellites. Geostationary satellites orbit the Earth at an altitude of approximately 35,786 kilometers, allowing them to remain fixed over a single point on the planet’s surface. This makes them ideal for broadcast services, as they can cover large areas consistently.
In contrast, LEO satellites orbit at much lower altitudes, typically between 500 and 2,000 kilometers. This proximity to Earth enables them to provide faster data transmission speeds and lower latency compared to GEO satellites. However, because LEO satellites move rapidly across the sky, a constellation of multiple satellites is required to provide continuous coverage.
Implications for the Industry
The partnership between Arabsat and Telesat is a testament to the evolving dynamics of the satellite communications industry. As demand for high-speed broadband continues to grow, especially in underserved regions, satellite operators are increasingly exploring LEO constellations as a viable solution. These constellations offer the potential to deliver fast, reliable internet access to remote and rural areas, bridging the digital divide.
For consumers and businesses, this means more options for connectivity, particularly in areas where traditional terrestrial infrastructure is lacking. The expansion of LEO networks also has implications for industries such as maritime and aviation, where reliable connectivity is crucial for operations.
A Look Ahead
As the satellite broadband market continues to evolve, the collaboration between Arabsat and Telesat could serve as a model for future partnerships. By combining resources and expertise, these operators are well-positioned to address the growing demand for high-speed internet access on a global scale.
The coming years will likely see further advancements in satellite technology and deployment, driven by collaborations like the one between Arabsat and Telesat. As these projects come to fruition, they will play a crucial role in shaping the future of global communications, providing new opportunities for innovation and growth in the space industry.
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